- Managing seven new investment funds
- Co-founder of leading UK infrastructure investment platform, GLIL Infrastructure
- Stewardship core to strategy
Local Pensions Partnership will next month reach its third full year as a LGPS service provider, managing assets of around £17bn and providing pension administration services to over 590,000 members.
The first of its kind in the UK, LPP was a pioneer of the pooling process, having originally been formed as a collaboration between Lancashire County Council (LCC) and the London Pensions Fund Authority (LPFA) in 2016, since adding the Royal County of Berkshire Pension Fund as an investment client in 2018.
Michael O’Higgins, Chair of Local Pensions Partnership, said:
“Borne out of the need to address serious inefficiencies among LGPS, LPP is built on five principles: leading investment management expertise, strong governance, administrative scale, consistent risk and liability management, and competitive and efficient pricing. The current global economic environment presents investors with many challenges, but as we reach our third anniversary, we are confident the foundations are in place to weather these while bringing efficiency and value for money to schemes across the UK.
“We are also seeing that the LGPS pooling model is being considered in Scotland and in the private DB sector. As a pioneer in pooling, LPP’s expertise and experience provides us the opportunity to share best practice and further collaborate as opportunities arise.”
Key achievements include:
- Full investment management delegation from clients. We have been managing 100% client assets across all asset classes from day one and have launched seven investment funds to deliver the benefits of pooled investment management. These funds span Diversifying Strategies, Fixed Income, Credit, Global Infrastructure, Private Equity, Global Equity and Liquidity1 . A Real Estate fund is due in H1 2019. All investment funds are managed in-house by LPP.
- Co-founder, with Northern LGPS, of GLIL Infrastructure2 ; a distinctive and credible platform designed to fully align the interests of like-minded investors who wish to exploit the very long-term investment opportunities in infrastructure investing.
- Integrated Responsible Investment activities to manage investment risks and opportunities that client portfolios face including proactive stewardship practices, making Environmental, Social and Governance (ESG) and sustainability fundamental parts to the investment decision making processes.
LPP continues to develop best practice across its activities including enhancing its capacity and capabilities to ensure long term resilience and success. Issues such as the impacts of longevity, low interest rates, and technological advancements present a range of opportunities and challenges.
The Future for LPP
As long-term custodian of clients’ pensions provisions, LPP’s development continues in the coming years, with future priorities including:
- The launch of a specialised Real Estate fund, to be the eighth pooled vehicle when it launches later this year, further expanding the investment offering managed in-house for clients.
- Looking for new/alternative investment opportunities, particularly in infrastructure and real estate, where our work, including with GLIL partners, is essential in driving vital investment in attractive infrastructure projects in the UK and abroad.
- Triennial valuations to come this year. With LPP’s heritage and expertise, we are supporting our clients and their employers, advising them on potential covenant impact and helping them to understand their liabilities and helping them design investment and funding strategies which enable them to better manage overall cash-flow and employer contribution rates.
- Enhancing the Pension Administration service, with three years of progress laying the foundations for increased efficiency for this crucial aspect of LPP’s work, particularly through its tailored member communications.
1 LPP’S LIQUIDITY FUND WAS ESTABLISHED IN OCTOBER 2016 BUT IS CURRENTLY DORMANT.
2 GLIL INFRASTRUCTURE WAS ORIGINALLY SET UP IN 2015 AS A JOINT VENTURE AND WAS RESTRUCTURED AS A REGULATED INVESTMENT PLATFORM IN APRIL 2018.